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SCMP Reporter

VITASOY International Holdings will conduct 25 per cent of its business in China before 1999 following the group's expansion into the mainland soft drink market.

    To date, the mainland market only contributes two per cent to the group's turnover, while Hong Kong contributes 80 per cent and the United States 18 per cent.

  The growing mainland business is attributable to the group's new plant in Shenzhen.

  The Shenzhen plant, in which Vitasoy holds a 70 per cent stake, is running at 50 per cent of its capacity.

   Vitasoy chairman and managing director Winston Lo Yau-lai expects the plant to reach 70 per cent to 80 per cent of its capacity next year, but this will also depend on the group's market share in southern China.

  Annual production capacity is expected to reach 34 million litres.

  The Shenzhen plant, which is to replace the Aberdeen plant, produces both carbonated and non-carbonated beverages, powder concentrate for Vitasoy products, and juices and teas in Tetra Pack paper cartons.

  'The plant will act as a springboard for the group's business expansion into the vast China market in the future, in addition to being a production backbone for Hong Kong and overseas markets,' the company says.

  To cater for the central and northern mainland market, Vitasoy is exploring opportunities close to Shanghai and Beijing with a view to setting up a similar plant to the one in Shenzhen.

  Mr Lo said the group's mainland development was satisfactory.

  'Despite the austerity programme imposed by the Chinese Government and despite the devaluation of the yuan in early 1994, the group's sales to China registered a 38.4 per cent increase over the previous year.

  'The group is committed to developing the China market over the next five years through joint ventures, licensing or contract packing.'   During the current fiscal year, Vitasoy will also focus on developing warehouses and distribution centres in Guangdong and thereafter in major cities in central and northern China.

  Besides growth in the mainland market, the group also predicts a double-digit increase in sales in Australia, Britain and Europe.

      Meanwhile, Vitasoy also runs a joint venture with the British-based Gardner Merchant group to provide large-scale contract catering services in Hong Kong.



Shenzhen factory spurs Vitasoy growth plans